Brussels, 2 August 2026

The European Union’s monetary map is unlikely to change again soon. After Bulgaria became the twenty-first member of the euro area on 1 January 2026, the European Commission’s latest Convergence Report concludes that none of the five remaining Member States legally required to adopt the single currency currently fulfils all the necessary conditions.

Czechia, Hungary, Poland, Romania and Sweden remain outside the euro area for different reasons. Some have relatively stable prices and sound public finances but have not entered the Exchange Rate Mechanism II. Others are held back by large fiscal deficits, inflation or elevated government borrowing costs. In every country examined, national legislation also remains insufficiently aligned with EU requirements governing central-bank independence, monetary financing and eventual integration into the Eurosystem.

The practical consequence is that euro-area enlargement has effectively stalled. Companies trading or investing in these countries will continue to face exchange-rate exposure, conversion costs and monetary-policy differences. Governments with weaker convergence indicators may also continue to pay a sizeable interest-rate premium compared with euro-area borrowers.

The euro now covers 21 of the EU’s 27 Member States

All EU Member States participate in Economic and Monetary Union, but they do not all use the euro. Following Bulgaria’s entry in January 2026, the common currency is now used by 21 countries. Denmark retains a Treaty-based opt-out, while Czechia, Hungary, Poland, Romania and Sweden have a legal obligation to adopt the euro once they fulfil the convergence conditions.

The convergence process forms part of the EU’s wider Economic and Monetary Union . It is not merely an assessment of whether a country can technically change its banknotes. The Commission and the European Central Bank must determine whether economic convergence is durable enough for the country to operate under a common monetary policy without generating instability for itself or for the rest of the euro area.

None of the five countries passes every test

The Maastricht framework establishes four main economic tests. Inflation must remain close to that of the best-performing Member States; public deficits should normally remain below 3% of GDP and government debt below 60% of GDP or be declining sufficiently; the national currency must participate in ERM II for at least two years without severe tensions; and long-term interest rates must remain within the applicable reference value.

The 2026 inflation reference value is 2.7%, while the reference value for long-term interest rates is 5.1%. None of the five currencies participates in ERM II. This fact alone prevents all five countries from qualifying for euro adoption, even where the other economic indicators are comparatively favourable.

Data refer to the Commission and ECB 2026 convergence assessments. Inflation and long-term rates cover the twelve months to May 2026. Fiscal figures for 2026 are projections.

Czechia is economically close—but has not entered the exchange-rate mechanism

Czechia presents the most balanced economic profile among the Central and Eastern European countries examined. Its twelve-month inflation rate stood at 1.9%, below the 2.7% reference value. Its projected 2026 deficit is 2.8% of GDP, public debt remains below 50% of GDP and its long-term interest rate of 4.5% also satisfies the applicable threshold.

Nevertheless, the Czech koruna is not participating in ERM II and Czech central-bank legislation is not yet fully compatible with EU law. Czechia therefore remains outside the euro despite fulfilling three of the principal numerical criteria.

For businesses, the continued use of the koruna means that invoicing, investment and cross-border supply contracts may still require currency hedging. Czech exporters remain highly integrated with euro-area value chains, making the absence of a common currency commercially significant even when exchange-rate volatility is moderate.

Hungary faces a combined fiscal, inflation and financing problem

Hungary fails the price-stability, public-finance, exchange-rate and long-term interest-rate tests. Average inflation was 3.3%, while the 2026 government deficit is projected at 6.2% of GDP. Public debt is forecast to rise to 75.1% and the average long-term interest rate reached 6.7%.

The Commission also identifies weaknesses in the national fiscal framework and institutional environment. These factors matter because convergence is assessed as a durable economic condition, not as a temporary statistical result. Weak institutions, unpredictable fiscal policy and risks to central-bank independence can translate into a higher risk premium demanded by investors.

Hungary consequently remains one of the countries furthest from euro adoption. Even if inflation moderates, fiscal consolidation, legal reform and participation in ERM II would still be required.

Poland is close on inflation but far from fiscal compliance

Poland’s inflation rate of 2.9% and long-term rate of 5.4% are only slightly above their respective reference values. Its main obstacle is fiscal policy. The general government deficit is projected at 6.5% of GDP in 2026, while debt is expected to reach 64.5%.

Higher defence expenditure is an important component of Poland’s fiscal expansion, but the convergence test remains governed by the EU fiscal framework. Poland is also outside ERM II and must amend legislation concerning the independence and integration of the Narodowy Bank Polski.

Poland’s large domestic market allows it to retain significant monetary-policy autonomy. However, companies engaged in euro-denominated trade continue to carry zloty conversion and hedging costs, while sovereign borrowing costs remain above the euro-area average.

Romania records the widest inflation gap

Romania is the clearest case of macroeconomic divergence. Its twelve-month inflation rate reached 8.4%, more than three times the reference value. The country is also subject to an excessive deficit procedure, with its deficit projected at 6.2% of GDP in 2026 and debt rising above the 60% Treaty threshold.

Its 6.7% long-term interest rate indicates that markets continue to demand a significant premium for Romanian government debt. The leu remains outside ERM II, and the Commission identifies weaknesses in fiscal governance and public-investment management.

Romania’s comparatively low price level suggests considerable long-term potential for real convergence. In the short term, however, rapid nominal convergence without stronger fiscal discipline and lower inflation could create additional instability rather than facilitating euro adoption.

Sweden meets the economic thresholds but retains the krona

Sweden fulfils the inflation, public-finance and long-term interest-rate criteria. Inflation stood at 2.2%, government debt is projected at only 36.6% of GDP and the long-term interest rate was 2.6%.

Its exclusion is principally institutional and procedural. Sweden has not joined ERM II, and national legislation is not yet fully compatible with the requirements for Eurosystem membership. In practice, remaining outside ERM II allows Sweden to avoid advancing to the final stage of euro adoption.

The Swedish case demonstrates that meeting the numerical Maastricht criteria does not automatically produce membership. Euro adoption also requires a deliberate political decision to enter the exchange-rate mechanism and prepare the legal and institutional transition.

What delayed enlargement means for companies and investors

The continued division between euro and non-euro EU markets has measurable commercial consequences. Businesses operating across the five countries must continue to manage currency conversion, exchange-rate volatility and differences between national and ECB interest-rate cycles.

Currency risk is particularly relevant for companies whose revenues are denominated in local currency but whose energy, machinery, financing or imported inputs are priced in euros. Exchange-rate movements can alter margins even when the underlying volume of business remains unchanged.

Borrowing conditions also differ. Governments and companies in countries with higher inflation and weaker fiscal positions generally face higher nominal rates and a larger sovereign-risk component. Hungary and Romania, both recording long-term rates of 6.7%, remain substantially above the reference value. Poland is only slightly above it, while Czechia and Sweden already satisfy the interest-rate test.

At the same time, independent currencies allow national central banks to adjust monetary policy to domestic conditions. This flexibility can be valuable during asymmetric shocks, but it comes at the cost of exchange-rate uncertainty and excludes countries from direct participation in euro-area monetary decisions.

Enlargement now depends more on national choices than on an EU timetable

The Commission’s report does not establish accession dates. It identifies the reforms each country would need before a positive assessment becomes possible. The first operational step would be entry into ERM II, followed by at least two years of exchange-rate stability.

Czechia and Sweden appear closest in terms of macroeconomic indicators, but neither has begun this final monetary phase. Poland requires substantial fiscal adjustment. Hungary and Romania face broader combinations of inflation, deficit, debt, financing and institutional problems.

Consequently, the next expansion of the euro area is unlikely to result automatically from improving economic statistics. It will require national governments to accept the policy constraints associated with ERM II, revise central-bank legislation and demonstrate that fiscal and price convergence can be maintained.

The 2026 assessment therefore sends a clear message: after Bulgaria’s accession, the technical door to further euro enlargement remains open, but no candidate is currently walking through it.

Sources: European Commission, Convergence Report 2026; European Central Bank, Convergence Report, June 2026. Data cut-off: 17 June 2026. This article is intended for information and policy analysis and does not constitute financial or investment advice.